Oil refineries

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Think about this! Little has been said in the GAO reports about the oil industry other than to say that we the US has a 2 month reserve of crude oil stored. (Likely more than that by now, as that was not the most recent report)That may sound comforting,and seems to pacify people into not looking beyond the crude oil requirements. What REALLY WORRIES me is the real lack of information about the true readiness of oil refineries. We can have all the crude oil in the world, but if the refineries are unable to produce the various fuels we will be TREMENDOUSLY IMPACTED in a long list of industries that require refined products. Yes, refineries in turn have large storage tanks, so the impct will not be felt immediately. However, if you think about it, seek out expert advice about oil refineries from people in the know on the inside, it is my strong suspicion that you will find that the oil refineries are far too huge, complex and contain so many many older and imbedded computer chips that they are NOT, nor will be anywhere able to produce. If I am correct in my assumption, it will be the quantity of refined oil storage rather than the quantity of crude oil storage that will be the buffer between availability of fuels to drastic decrease if not total deficiency of refined products. That of course would grind to a halt airlines, power plants relying on fossil fuels, many chemical industries reliant on oil products. The list goes on and on. My feeling is that OIL REFINERIES' ability to operate or NOT OPERATE, (more importantly)is going to have BY FAR THE MOST DEVASTING IMPACT on the U.S. as well as the rest of the world in times to come. Obviously this will not be felt Jan.1st, but it is just a matter of time before the truth has nowhere to hide. This is a huge industry. Surely among your subscribers there are people knowledgabe in this field that could shed some light into this abnormally quiet area of information. Please submit to me at my e-mail sight as well as TimeBomb 2000!

-- Beverley Bonner (bevbon@hawaiian.net), October 28, 1999


If you live within 5 miles from a refinery, you're toast!

Beverley, haven't we mudwrestled before?

Aren't you the one with the big t.......?

-- King of mudwrestling! (Kingofspain@madrid.com), October 28, 1999.

---for what it's worth department: as part of my "research" into y2k, I talked to a fella worked in a refinery. He said-I'll paraphrase this, it was two years ago-IF they have to go to manual controls, and IF the refinery is more or less intact itself, and IF they have power, that with 100% of the workers living round the clock at the plant, they can maybe do around 10% of normal output. His take was that there where way too many automated systems that have potential chip problems, and that most likely you would get zip fuel, at the best, and at the worst, the place might self destruct. He's been preparing big time, and won't be at work the last few weeks of the year.......

-- zog (zzoggy@yahoo.com), October 28, 1999.

All oilwells all ovewr the world will shut down Jan. 1, 2000. It will take a year to repair them all! BUY A BIKE TODAY!

-- Y2K ready (Y2K@ready.com), October 28, 1999.

Tuesday night, on the Lumen Foods IRC forum, an oil/gas industry consultant dropped by.

The consultant's analysis suggests that we'll have between 24% and 36% of our current oil supply (gasoline, fuels, etc.) a few weeks into 2000. Another comment by the consultant -- "We have 3 or maybe 3-1/4 DAYS of gasoline available." Another: The strategic oil supply (supposedly 3 months of poor crude oil) can't be pumped out of the salt caves fast enough to supply our needs, even assuming all refineries are running and could process that kind of crude oil.

There was a lot more, but those were the points that caught my attention.

-- Dean -- from (almost) Duh Moines (dtmiller@midiowa.net), October 28, 1999.


I believe at least part of what the consultant said is verifiable;

The US Strategic Petroleum Reserve has almost 600 million barrels of crude in stockpile and can pump out at about 4 million barrels per day. Current USA daily demand is for 18 million barrels per day.

-- Bill P (porterwn@one.net), October 28, 1999.

"There's many a slip 'twixt cup and lip."

Power -- Pumps -- Pipelines/Railroads -- Refineries -- Pipelines -- Depots -- Local distribution -- Retailers -- Financial services -- (I can't go on like this!)

"We made too many wrong mistakes." (Y. Berra)

-- Tom Carey (tomcarey@mindspring.com), October 28, 1999.

Not all crudes are the same.

Crudes from certain fields and countries have properties which make them useful for specific puposes. Some for asphalt production, some for other applications, and very few are of the quality necessary for lubrication grade.

Also, a refinery is specifically set up to run certain crudes. It might be a West Texas crude, a Venezuelan crude or a crude from Mexico. Each crude is different and requires different methods to refine it into products.

-- snooze button (alarmclock_2000@yahoo.com), October 28, 1999.

1) I've been in the refining end of the oil biz (trading and marketing NOT chem engineering or IT), and I can firmly relay that the oil industry is not expecting any big refining problems. All this FOF commentary is over played on this forum. They'd done statistically sampling. They have NOT found extensive chip problems according to the people I've talked to and industry publications. Maybe its a masterful spin job but I doubt it.

2) There's hundreds of very asstute individuals, many of which have technical backgrounds, that are involved in the spot and futures markets trading of oil and oil products. If the industry or any given company knew they had big pending refining problems, they'd be all over the disparity in market values. The crack spreads, that reflect refiner's margins, have recently been at near all time lows on distillate (heating oil and diesel) and moderately below average on gasoline. The markets are NOT reflecting any big rollover refining risks and many of these people who participate in these markets are far more knowedgeable than we are on this partiular subject.

3)Even if petroleum refineries have rollover problems, they'll predominately manifest as hot or cold shutdowns, not explosions.

4)Maybe its similar to GoldBug Andy's gold market contentions: We have interplanetary supernatural beings manipulating our oil markets because they're gonna take over!

-- Downstreamer (downstream@bigfoot.com), October 28, 1999.


I have to agree with Downstreamer. My knowledge is from personal experience and as a Chemical engineering consultant to refineries. Most refineries have the capability to operate their processes without the computer control systems (and some refineries don't yet have computerized control systems!). Those that don't surely have addressed their control systems as it is the crux of their facility. The computers basically allow for optimization of the processes. Additionally, a mid-sized refinery in the US recently conducted a test of their computerized control system (the most common brand in use) with the system's manufacturer on site. The test was conducted while half of their plant was shut down (minimizing potential impacts). Although there were some minor operational problems, the facility continued to run without the need for shutdown or curtailed operation.

The oil refineries I've talked to have been addressing the Y2K problems for several years now and are Y2K ready, either through replacement, workarounds, or contingency plans. Additionally, most are planning on having extra operating and engineering staff on hand despite all their progress. I'm not trying to say that nothing is going to go wrong, but what does happen should be minimal and result in a safe shutdown at the worst. (Note that refineries experience problems such as power failures all the time, sometimes as frequently as 4-5 times a year.)

I hope this helps alleviate your concerns.

-- Larry (larrywarren@yahoo.com), October 28, 1999.

Also, see


(Sorry, I don't know how to format it as a link.)

-- Larry (larrywarren@yahoo.com), October 28, 1999.


I've broached this subject from time to time on this forum since last summer. I did so after having bumped into a lot of Oil industry folks while on business trips around the country in the previous 6 month period and hearing their stories and evaluations. These fellows tell an entirely different story than what Downstreamer or Larry are saying. This is not to say that I haven't heard some fellows talk like Downstreamer of Larry.

What is interesting is that the folks who told me "its no big deal," or "all is ok"... were the ones who didn't know the first thing of what they were talking about. They were only spouting off the company line in complete ignorance. Many were the bosses who were either clueless or were in the midst of making desperate moves and rolling dice on gambles that type-testing would bail them out of a Y2K jam. Plus, there are lot of chips out there thought NOT to have any dates in them but actually do because they were "subbed" by the mfr with a dated-stamped chip, or that are connected surreptitiously to a date stamped system that was specially custom-wired by the engineer but wasn't market on the schematics cause it was done on-site on-the-fly in a hurry. Not everyone in the oil biz realizes this happened or that it was as frequent as they'd like to admit or hope. This is why ENRON has made the full disclosure on their 10-Q... frankly all the rest of these oil company executives need to be prosecuted to the fullest extent of criminal law for their fraudulent and misleading 10-Q statements that fail to disclose the full risks like ENRON...and ENRON states in their 10-Q that ALL OTHER OIL co.s are in the same boat on this and have the same exact risk problems regarding testing.

In other words folks, the oil industry is really only about 10% done not 90%... in reality they've LIED to you big time with smoke and mirrors about how they've handled their embeddeds problems.

These guys are clueless for the most part about anything connected to Y2K. I say that because I'd also end up talking to other guys who were actually doing the Y2K remediation who would tell a totally different story.

Furthermore, they would indicate that only a small fraction of the systems were even being looked at. Furthermore, no real testing was being done live and online because they'd have to shut down the refinery and run a HIGH risk of losing the refinery for 30-90 days of NO production if it blew out a critical embedded part. THUS MGMT made one of those executive decisions not to do things the right way but rather to slough things off and keep the production lines going to keep quarterly reports as hefty as possible, especially when crude prices took a severe tumble.

Bench type-testing is all that has been done.... Funny thing is that the embedded consultants have told them that the odds are about like rolling the dice for a failure and the maker if still around refuses to honor any warranties for bench testing! In other words, these guys have been told that bench testing is insufficient and places the whole operation at a 50/50 risk...but full testing does risk significant downtime production losses prior to Y2K, unacceptable to mgmt. For more on why bench-testing is a joke, see Bruce Beach's extensive report on his in-the-field surveys regarding embedded systems in the gas and chemical refineries. The link is given along with the others below.

Let me say this regarding Downstreamer and Larry. Unless you're an operating engineer on those units climbing the riggings you don't know the first damn thing of what you're talking about regarding the subtle nuances of Y2K. That's the word from some of my sources who've advised me on the Y2K issues.

Deskbound engineers and lab techs have major limitations in under- standing the technical aspects of embedded problems inside the lines. My sources are the folks who put their lives on the line every minute of every hour that they are at work. One mis-step by these guys could kill deskbound engineers sitting in a cushy office a few blocks away or over in a nearby lab.

When a "cat-cracker" blows sky high, depending on wind conditions it can have an effect similar to a nuclear blast w/o the radiation. I know, (yrs ago) my father just missed an event like that by a few minutes as he'd already clocked out and gone home. Fortunately the wind was out of the South direction and the force of the blast didn't carry into the critical portion of the cat. As it was, the blast shook buildings 50 miles away, I don't know how far it would've been felt if the wind had been out of the North. I was about 3 mi away and it just about knocked you to the ground. So, refineries were dangerous 50, 40, 30, 20 & 10 years ago and STILL ARE to this day.

Right now, behind the scense, Oil co. contingency planners are scrambling to prepare for a variety of contingencies among which the safety hazards are a chief worry. I've got one source in such a position doing Y2K prep for a major oil co. and they're concerned with major safety risks so don't let these other fellows mislead you. There isn't one major oil co. exec that is not now sweating bullets over Y2K related issues. They had no idea of how serious a problem it could be until about summer of 98 when they got an "inkling" then they got somewhat concerned around Christmas of 98, a lot of companies hit the panic mode and within 3 months thought it was all better and have remained that way until about the past 3 weeks or so. I guess someone finally reported to the top of the castle echelons that their approach to embeddeds does indeed have alot more downside risks than having done proper testing that risked a production stoppage that might last 90 days or so. From what I'm hearing some of the real movers and shakers are now starting to get the Y2K religion while other top execs are still left totally in the dark about the Y2K embedded's problems... Most of these guys apparently are thinking or else just pretending that all embeddeds have been physically tested and found to be ok or were replaced. This IS Categorically untrue...and probably, only about 5% to 30% of all systems were ever tested for possible problems...which leaves anywhere from 95% to 70% of systems as being totally unknowns???? I'll deal more on this in a later post perhaps.

Now, having said all of that, does this mean that all refineries will go down? Perhaps, and then again perhaps not. We don't know for sure. HOWEVER, the ODDS are strongly in favor of problems and substantial risks still persist for extremely significant problems to develope. Will they? Perhaps. Must they? NO. Must the rollover be only a bump in the road? I'd say the odds of a BITR for the Oil Industry are about 1 in a 100. Here are some but not necessarily all of the TB 2000 threads on oil in threads dating to last summer. There's probably more but I just didn't get them all copied.

Oil/Gas are the real problems in Y2K? http://greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=000xLU

Did some Polly's want names and proof that the oil industry is in trouble? http://greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=0010Vc

Oil and Y2K -- An Updated Report ... by request http://greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=001KHH

Fast Facts for Flint on Oil Industry imports -- Y2K implications http://greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=001aLH

Oil Industry Embedded Systems -- Baker Hughes Inc Non-compliance Problems http://greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=001apB

SEC 10-Q Assessment -- Oil Co. ENRON -- This one will make your hair stand on end! http://greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=001ay3

Y2K, Oil Prices, the Fed and Bubblevision http://greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=001Suj

Update on Saudi Oil Ports -- not good http://greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=001Uxp

DogGone: Heard Anymore Re Saudi Oil Ports?? http://greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=001R8K

The Gov's gonna consider Strategic Reserve oil sales http://greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=001SUO

Some European oil companies are now stockpiling fuels http://greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=001UB9

Iraq decides to wait and see on Y2K oil disruption (they're doing nothing) http://greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=001Utw

For 2 oil rich nations, Y2K efforts in pipeline http://greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=001eCw

Extra gasoline shipments planned http://greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=001dN5

Will there be a Y2K oil crisis? http://www.wbn.com/y2ktimebomb/Industry/Utilities/jmau9933.htm

Bruce Beach Report on Embedded systems and chemical and gas industries http://www.webpal.org/Gas.htm

-- R.C. (racambab@mailcity.com), October 28, 1999.

The oil company I work for just added 50+ new mission-critical systems to our Y2K project this week. All but one was an embedded system.

Got gasoline?

-- Dog Gone (layinglow@rollover.now), October 28, 1999.

Dog Gone,

That's interesting that your co. is "adding" new systems...Supposedly most are now cutting off any new changes to the system so that they don't introduce any new bugs into the remediated system. It sounds to me like your co. is sooooo far behind that they're scrambling to replace instead of remediate. Sounds like they're "toasted" already.

-- R.C. (racambab@mailcity.com), October 28, 1999.


I didn't mean to imply that we are adding new systems. Quite the contrary. We're locking down. But suddenly on our Y2K database, it indicates that we've discovered new mission critical systems to investigate and remediate, if necessary. Some of this appears to be because of a recent purchase we made of some offshore platforms from another company. There are some embedded systems on them that we are not familiar with.

Perhaps a quick determination can be made whether these systems are ok. If they're not, we're probably hosed. Too little time.

But as I've posted before, we've only done a spot check on our embeddeds anyway. There never was enough time to test each component. Totally unrealistic.

-- Dog Gone (layinglow@rollover.now), October 28, 1999.

So....Dog Gone & RC: Any more news on those Saudi oil ports? Heard anything from your sources about their water purification (saline) systems?? Hope you can keep us up-dated as your sources will allow.

-- jeanne (jeanne@hurry.now), October 28, 1999.

Nothing new on the ports specifically. However, the audit of the Saudi telephone system indicates that only 23 of the 45 critical COBOL applications there will make it. ARAMCO doesn't have its own phone network.

Think of the bright side, though. Demand for mid- east oil will go down if the grid goes off and the refineries shut down.

-- Dog Gone (layinglow@rollover.now), October 28, 1999.

Dog Gone,

Thanks for the clarification. I wasn't sure what you meant, which is why I posted as I did. I also find your follow up comment equally fascinating:

"But as I've posted before, we've only done a spot check on our embeddeds anyway. There never was enough time to test each component. Totally unrealistic."

Yes, this is what I'm hearing also from my oil industry contacts across the industry. If I'm understanding you correctly, you're saying that your oil company only did "type-testing". Is that correct?

BTW... have you seen the threads up above about the embeddeds debate started by Shuggie...the pollie who thinks things are "no big deal"?

That guy doesn't have a "clue" regarding embedded systems in the oil and petrochemical industries. Might do some good if you'd go up there and chime in with what is really happening in your firm. I can't believe that the pollies have come back for a concerted attack on this issue at this late date... I guess I need to report the Baker Hughes Inc. website lists of non-compliant products that they're selling or attempting to remediate.

Thanks again for your input.

TO JEANNE: -- I've not heard anything more on Saudi Arabia other than the source that Dog Gone (or somebody) here has posted. I suspect that there's no good news to report from that country.

-- R.C. (racambab@mailcity.com), October 28, 1999.

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